The Republican Party in America last month lost an election it ought to have won. No US president since Franklin Roosevelt had been re-elected when the country's unemployment rate hovered at more than 7.2%. Only two post-World War II presidents with job approval ratings of less than 50% had been voted back to office. But Barack Obama bucked both those trends.

Obama won because his rival Mitt Romney and the Republican Party in 2012 fought a campaign that belonged to the 20th century.

They thought that they would sail to victory by securing the support of their traditional vote bank and by ensuring that they turn out to vote in large numbers. They succeeded in their strategy only to discover that the nature of the electorate had changed. Obama forged a powerful coalition of blacks, Hispanics, women and younger whites who voted overwhelmingly for him and propelled him to victory.

REMEMBER ROMNEY'S LOSS

The Bharatiya Janata Party, India's principal opposition party, would do well to reflect on the loss of the Republican Party. The shoddy performance of the Congress-led UPA government has created a spectacular opportunity for the BJP to return to power. If elections were held today, even the most optimistic Congressman would not claim that his party would come back to power. Even if the government was to last the full term, the prospects of a dramatic turnaround in its performance or image are dim.

But the BJP has to decide what kind of a campaign it wants to fight and what kind of an image it wants to project in today's changing India. What kind of signals does it send when it raises the ante to the extent that it did against the entry of foreign supermarkets into the country? What do potential prime ministerial candidates gain by indulging in the kind of MNC-bashing that would have done George Fernandes proud? And what would have happened to investment and growth if the government's decision to allow FDI in retail had been overturned on the floor of Parliament?

The BJP believes that the urban middle class is its natural constituency. A right of centre party that claims to be strong on national security with a tradition of supporting free enterprise should strike a chord with the middle class and for a long time it did. But the composition of this class has changed in the past two decades with the advent of liberalisation.

Many of its constituents are direct beneficiaries of investment and the growth that accompanies it. They have seen how in the past two decades, political parties and vested interest have opposed foreign investment in all kinds of sectors, ranging from soft drinks to telecom to insurance. They have also seen how the opening up of these sectors has benefited them as consumers, employees, and service providers.

TRADE ROUTES ARE CHANGING

It is said that the BJP had no option but to oppose FDI in retail because it threatens the livelihood of its most loyal supporters - shopkeepers and traders. There was a time when it was a smaller political party and traders formed an important constituent of the nascent middle class.

The rise of a strong professional class during the past two decades has shrunk their share as well as their influence, and the BJP, like America's Republican Party, should be wary of becoming a hostage of an interest group whose influence is on the wane. Supporting free enterprise no longer means just protecting the trader. Â

Moreover, the old trader families are themselves diversifying, with younger members starting new businesses and becoming MBAs and chartered accountants. Finally, and most critically, the small shopkeeper is too well entrenched in every nook and corner of the country for Walmart to seriously threaten his existence.

MISINFORMED ATTACKS

The BJP also needs to wonder whether a modern party that aspires to form the next government should launch misinformed attacks on multinationals. Forget the fact that both PepsiCo and McDonald's have refuted the charges levelled against them. Forget the signals it sends to international investors. Think about the 20-something living in Delhi or Mumbai, who is going to vote for the first time in the elections.

He has been happily sipping Pepsi from the time he was a child and has spent many hours at a McDonald's outlet. It is unlikely that he will suddenly get swayed and start thinking of these companies as villains that have fooled the country. The rhetoric of the 1990s sounds hollow to the young voter of 2012.

TOWNS HAVE CHANGED

The BJP fared poorly in urban areas, both in 2004 and 2009, because it failed to recognise the changing forces and impulses of these town and cities.

The public antipathy to corruption scandals and the perceived ineffectiveness of the government give the party a chance to reclaim the towns and cities that supported its rise to power in the 1990s. But the citizens of these areas have over the past decade seen the virtues of growth and investment and the difference it makes to their lives. A party that does not recognise this central fact will appear to be outdated.

There is, of course, a view that the BJP raised the pitch on FDI in retail not because it opposes the entry of Walmart and Tesco, but because it saw this as an ideal opportunity to embarrass the government. The problem with this approach is that it engenders cynicism. And cynicism cannot win an election.